Interesting LosingWeight.com Appraisal Thread

There’s an appraisal thread at NamePros discussing the value of LosingWeight.com. In case you don’t know appraisal threads can only be started by domain registrants and in cases of high value names moderators at NP do due diligence.

The member posting the appraisal is a new member and goes by jake238 (I’ll just call him Jake in this post). Jake claims 2,400 ‘daily visitors’ and mentions a site was launched on it in October of last year. As expected, appraisals are all over the place but there seems to be a consensus that the name alone should bring at least low to mid five figures, even to a reseller.

Here’s the catch, as Jake starts interacting with members and responding to appraisals, he starts talking and divulges that his company has spent $30k on the “site creation” including “outsourcing programmers and writers.” Wow, looking at the site which lacks even a decent logo, I am a bit blown away by the amount of money spent to ‘develop’ this LosingWeight.com website.

As mentioned by one of the members offering an appraisal, the forum on LosingWeight.com is all but dead. On a weight loss or health website in general an active forum is important. Jake admitted the forum was indeed dead which really bites because he also mentioned a lot of money was spent integrating it into the website.

Jake then proceeds to say that his company is willing to accept $140k for the name and that “the sole reason we’re selling the site is because we cannot continue the funding for content.” To me and any potential buyer this sounds more like “I need to sell so I can recoup money I invested in this project and let someone else deal with it.” One could also deduce that if it’s for sale so quickly after development, there must be a big issue with the amount of money spent on development compared to the amount of revenue earned since.

Jake, you have shot yourself in the foot! (IMHO) You have a great .com, you made a mistake and spent way too much developing it and I can probably guess based on your asking price what you paid for it, so now you have almost zero chance to make money with it. A savvy (or unmotivated) investor owning this name could probably have gotten six figures or maybe more without ever doing anything with the name except for renewing it for 10 years out.

One of the biggest problems I see here is that Jake and company bought this premium domain name because it is a popular topic and figured that by throwing some money at development on it they could recoup the investment plus profit in a short period of time. I’m afraid Jake and his company are not passionate about or have very little knowledge of the weight loss business as is evident by the site and it’s success (or lack thereof). The site provides nothing more than any other website in that niche provides (weight loss calculators and a bunch of articles). Even to maintain traffic more money must be spent every month!

Now, I am definitely not saying that owning LosingWeight.com or other weigh loss domain names as an investment is a bad idea, whether you give a damn about losing weight or not, LosingWeight.com is a great name. Also, if you are in the weight loss business, have serious ties to that industry or have plans for a startup in that space – this name would suit you perfectly. The biggest mistake Jake has already made is developing and clinging to this website, claiming it is making the domain name more valuable.Here’s the appraisal thread.

I guess the big lesson here is developing a premium domain name may make it less valuable than doing nothing with it at all. I definitely think this is the case with LosingWeight.com.

This is a mistake that I think a lot of new domain investors are making. I would have done the same thing a few years back if I had more money to invest with, probably more than once. Unless you have a long term plan, development of a premium domain name is not just bang bang and cash out big. It really helps to have some knowledge and connections into any industry you are trying to break into, especially in markets with very high competition. You can’t just rely on the power of the name and some haphazard development to make you money, you’re better off spending a fraction of that money hiring someone to broker the domain for you.

I think the biggest mistake Jake made was posting an appraisal thread on a public domain forum. It can only hurt the potential sale price. He’d have been better off turning the domain over to one of the big domain brokers instead, imo.

I think most potential buyers really just look at what the site has to offer from a pure SEO stand point because they can change the look or work on improving things like forums (though an active forum with users would obviously be much more attractive). If I had a dollar for every time I approached someone about buying just a domain name by itself and they commented about how much it would take to get it ranking I’d be rich. So I can’t say I agree 100% with this. I think it just depends more on the buyer and what they are looking to get from the purchase. Like Maxwell pointed out, a company like Weightwatchers would likely want to do some radically different things to get it ranking quickly and maybe even start from scratch and would probably not even factor in the website at all.

I think the $140k is a fair starting price for proactively selling this domain. I’d say the domain is worth about that before even considering links and seo position off of its potential alone. I just ran my valuations on it and it is showing a wholesale price of :$41,243, fair market price of :$123,729 and full retail hold out value $412,430.

In my opinion, the owner’s claim of having spent $30k in developing the WordPress site looks overstretched. The site has not more than 500 articles and 1000 forum posts. You can have 500 articles written anywhere from $500 to $5,000 ($10 per article). Additional $1,000-5,000 on site development. Going by the number of links, a max of $1,000 on SEO. Even on being very liberal, I can only manage to pay $11K for the site. I would probably spend $3,000-$5,000 to get a site like this ready. How did he manage to spend such a huge amount on this site?

There are a couple factors at play here. I agree that if you’re going to develop a premium domain, you really need to put a lot of ongoing effort into it. If you don’t you could end up with a site that makes very little if anything. With a site up on the domain, that will be the first thing many high-end wholesale buyers or site buyers would ask – how much traffic/revenue does it get?

If you have no site on it, the expectations of current traffic/revenue usually aren’t high, especially these days when type-in traffic is considerably down from years past. The moment you have a site on a premium name, the expectations are that you should have been able to pull in a substantial amount of traffic and bring in decent revenue. The truth is, that’s harder to do than it used to be. You can’t just slap up a weak site and hope that the rankings will come.

I’ve also found that many serious buyers (end users) would prefer little or no development history on the domain at all. Once you develop, especially if it’s development that is not up to the standard of the domain, then that could actually turn away some buyers you might have otherwise gotten.

It’s true that some buyers won’t care at all and would just buy the domain for what it is, but in that case, all that development cost is wasted money.

I own http://www.losetheweight.com and had it developed for under $300.00 yes three hundred dollars and I only did it as a defensive move to protect it from domain hijacking. If you watch the weight watchers commercial they use the term “Lose The Weight” a bunch of times. I think the name is a low 6 figure name given the size of the industry.